Bursa Malaysia Not Opposed To High-Frequency Trading In Future

Bursa Malaysia Bhd. (1818.KU) Chief Executive Tajuddin Atan said the exchange has increased the amount of proprietary trading as it looks to boost liquidity on a daily basis.

Bursa Malaysia, the Malaysian Stock Exchange, isn't currently involved with high-frequency trading firms. Still, the exchange sees an opportunity there, especially as high-frequency traders are increasingly looking abroad as the U.S. gets more competitive and regulated.

"We have approved and increased the number of proprietary traders by threefold over the last month," Atan said in an interview. "It's a start. Once we have experience in that particular area, I think we might consider high-frequency trading."

In regards to the increased scrutiny that has come from regulators as high-frequency trading has grown, Atan said, "We are observing it from a distance."

Atan made his comments at the Invest Malaysia conference Tuesday at the New York Stock Exchange, at which Malaysian Prime Minister Najib Razak said he expects foreign-investment flows to continue to stay strong in his country in 2011.

Last month, CME Group Inc. (CME) said it plans to expand its tie-up with Bursa Malaysia. The world's largest futures exchange operator by contract volume bought a 25% stake in the Malaysian bourse's derivatives unit in 2009.

Bursa Malaysia didn't close the door on considering the idea of cross-listing future contracts with CME Group in the future.

"I wouldn't say we're not ready, but I'd say there's enough for us to do right now in growing our present market," said Uday Jayaram, global head of securities markets at Bursa Malaysia.

-By Steven Russolillo, Dow Jones Newswires; 212-416-2180; steven.russolillo@dowjones.com

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